Compliance- major issue concerning service tax

Mumbai: At a workshop, 'Service Tax: Overview and Issues' organised by the Confederation of Indian Industries (CII) in Mumbai, K P Singh, director general, directorate of service tax revealed that service sector contributed about 56 percent of GDP in India while emphasising the importance of service tax.

Addressing some key issues concerning service tax, Singh said, " Numerous instances have come to notice that despite recovering service tax from service receivers the service providers are not depositing it with the government."

He emphasised that before releasing the payments wherever any taxable services are received by the companies proper service tax registration number, service tax code and accounting code be specified in the invoices received from the service providers.

Singh said that payment of service tax has not matured in the country and that the government is trying its best to improve it. In order to solve the problem the government has introduced e-payment for easy settlement of deals. Singh said his department would provide full support to execute smooth implementation of service tax.

Gaurav Nanavaty, chairman, 'CII western region' and managing director, Anup Industries said, "Service sector is growing at a phenomenal rate all over the world, though it may vary in degree and magnitude among the various countries. In developing economies, this sector is steadily growing in size. The rates of taxes on commodities need downward revision in view of the development all over the world, particularly the ASEAN region. The only way to achieve this is to include more services in the service tax."

Banmali Agrawala, chairman, CII 'Maharashtra state council' and managing director, Wartsila India said, "CII would like to engage in a dialogue with the government in order to resolve the issues faced by the industry. " He said that the industry needed to discharge its obligation completely.

Other speakers included Sachin Menon, Partner, Ernst & Young,. Bhavna Doshi, of Bharat S Raut & Co advocate V Sridharan, and Nihal Kothari, head, taxation, Hindustan Lever Ltd.